October 22, 2014

Cash For Clunkers – Appliance Clunkers

Here’s some good news if you’ve got an old household appliance you’ve been wanting to replace. The government’s $300 million dollar incentive plan will help you pay for it. The plan is meant to help the appliance industry by giving a boost to slow appliance sales nationwide, but the relatively small amount of cash will not make a big impact on major appliance appliance dealers such as Whirlpool, GE, and Electrolux. There are also some potentially confusing details to be worked out:

The Wall Street Journal says unlike the clunkers plan, the program allows each state to pick qualifying models and tailor rebate amounts. Ohio might decide one washing machine qualifies for a $100 rebate, while California picks another for $125.

Manufacturers and retailers said they are reluctant to ramp up production or order new stocks until it is clear what models qualify. The Department of Energy, which designed the program, wants states to focus on just 10 categories of appliances carrying the federal Energy Star seal of approval for efficiency.

But other details are still uncertain. States could ask to include up to 46 other types of products, ranging from light bulbs to computers. While rebates are expected to range between $50 and $200, qualifying models and precise rebate amounts won’t be provided until late this year or early next.

Some of the nation’s biggest appliance makers are lobbying to make the plan rules uniform nationwide. They said the unknowns and the varying rules by state will make the program harder to explain to shoppers, in turn making it tougher to win sales.

The program “will provide consumers a unique opportunity to save money on energy-efficient appliances,” said Dave McCalpin, chief marketing officer for GE Appliances. He said Fairfield, Conn.-based GE is working with state governments to adopt rebate programs that rely on Energy Star ratings.

Some states are considering standards that exceed Energy Star requirements, a move GE opposes. “We believe it is very important that rebate programs are consistent across the country,” Mr. McCalpin said.

The stricter proposals underscore criticisms that the Energy Star program is not tough enough in raising energy efficiency. The Environmental Protection Agency is looking at revising the program’s standards. If it does so after the states set their rules, the rebates could end up subsidizing some appliances that are not as energy efficient as they could be.